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A Dutch Web site claimed victory in a David and Goliath battle against Microsoft Corp. this week after the software giant’s AntiSpyware program flagged the Dutch company’s homepage as malicious content.

Microsoft has agreed to compensate and apologize to the operator of Dutch directory site Startpagina.nl for designating the site as a “browser hijacker” in the beta version of its free AntiSpyware software, according to Startpagina.nl Director Bert Wiggers. The amount of the compensation is not being disclosed but the apology is public, as Microsoft has agreed to keep an acknowledgement of the error on its Dutch Web property for four weeks, according to Wiggers. The apology is what matters the most to me because, as far as I know, Microsoft has never done that beforeBert Wiggers>Text”The apology is what matters the most to me because, as far as I know, Microsoft has never done that before,” Wiggers said Wednesday. The row began shortly after Microsoft first launched its AntiSpyware beta in early January. The free program is intended to block malicious programs that secretly snoop on people as they surf the Web. Soon after the software was launched, Startpagina began receiving complaints from a handful of users who said that the new Microsoft program was blocking the site as malicious content and directing them to go to a Microsoft start page, according to Wiggers.

Startpagina.nl is a popular directory site in the Netherlands with around 4 million daily users and competes with Microsoft’s MSN.nl site, Wiggers said.

Startpagina.nl, which is owned by Isle Media BV, began calling and sending letters to Microsoft to make the U.S. software vendor aware of the problem but received no response, according to Wiggers. After threatening court action, the Dutch company received notice on Friday that Microsoft had agreed to settle the dispute. The agreement was finalized Monday, with the Redmond, Washington, company agreeing to pay the compensation and post an apology on its MSN.nl property, according to Wiggers.

Microsoft updated its AntiSpyware beta last week and no longer singles out the Dutch site.

The software maker put the matter down to an error, Wiggers said. However, he believes Startpagina.nl was targeted on purpose.

“I think they did it just to strengthen their own position,” Wiggers said.

Microsoft representatives weren’t immediately available to comment on the matter Wednesday.